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Thursday, February 27, 2014

Following Alnylam’s achievement of making subcutaneous
administration work for RNAi gene knockdown in the liver by conjugating RNAi
triggers to the GalNAc sugar, antisense companies have started to copy the approach. As RNAi Therapeutics have made great progress in targeted delivery, antisense companies are starting to realize that in order to stay competitive and improve the safety of systemic uses of antisense, they need to get away from the notion of 'naked'/unformulated delivery that relies on swamping the body with phosphorothioated oligonucleotides.

This has become apparent at the AsiaTIDES
meeting here in Tokyo where both Santaris
and ISIS Pharmaceuticals disclosed their great interests in GalNAc conjugation.

In
collaboration with Axolabs (the part of Roche RNAi Therapeutics that was not acquired by Arrowhead Research and that had familiarity with GalNAcs), Santaris presented phosphorothioate-LNA Factor
VII (liver) knockdown data showing 80% gene knockdowns in mice following a single
dose of 0.1mg/kg. Even more potent
knockdowns were seen at 0.25mg/kg and above.

In another
presentation by ISIS Pharmaceuticals on their cardiovascular franchise, the company noted that
they will follow up on their initial Apo(A) (‘little A’) candidate with a GalNAc-conjugated
version. With this, they expect to
increase potency by up to 10-fold, thus allowing for 10-30mg (~0.15-0.45mg/kg)
dosing.

This
illustrates the utility of the GalNAc receptor (ASGPR) and how the competing
RNAi and antisense technologies are fertilizing each other.

Regulus Therapeutics, of course, is the first antisense
(anti-miR) company of sorts that has adopted GalNAc conjugation for their
liver-directed programs, most notably anti-miR122 for HCV that is about to
enter clinical development. Regulus obviously
has a license to GalNAc from Alnylam.
Whether this also applies to ISIS Pharmaceuticals, remains to be
seen. The word on the lab floors is that
GalNAcs per se are not
patent-protected, so ISIS may use an entirely different linker strategy to Alnylam
just as Arrowhead Research does with its
GalNAc-targeted DPCs.

What it
means for Tekmira and Marina Biotech

Since some
of you are following my investment strategy, here is what I think this means
for the liver-directed efforts by Tekmira and Marina Biotech (both of which I own).

Marina
Biotech could obviously
follow the same path as ISIS Pharmaceuticals and Santaris in adopting
GalNAc conjugation with its CRN technology.
As such, there should be no change in the competitive value of CRN
compared to Santaris and ISIS antisense. It
could also attach GalNAcs to their liposome-based SMARTICLES for which delivery to the liver
remains to be demonstrated. To do all
this, however, Marina Biotech needs to grow and establish in-house R&D.

For Tekmira, it means that RNaseH antisense are
getting close in potency for gene knockdown compared to the 2nd gen
MC3 SNALP LNPs (85-90% TTR gene knockdown in
humans at 0.3mg/kg). With
the 3-fold more potent 3rd generation SNALP LNPs which should enter the clinic this or
early next year (TKM-ALDH2, TKM-HBV), Tekmira should stay well ahead of its competition with
the most potent gene knockdown technology for the liver. This means more
addressable diseases and in most cases higher treatment effects as well. And if it incorporated GalNAc-conjugated
lipids into their liposomes, too, maybe that would extend that lead even further.

If gene knockdown in the liver is not
a great example for why you need a competitive free market economy, then I
don’t know what is. And, of course, there is no better example of why you need
a lab ;).

Tuesday, February 25, 2014

Tekmira today presented impressive data on pre-clinical
messenger RNA (mRNA) delivery to the liver and solid cancers (PR here, slide deck here). The data presented at the AsiaTides in Tokyo greatly exceeded those reported in the literature, including a 4 log increase in
potency of liver gene expression compared to the seminal paper by Kariko et al.paper (2008).

Importantly, the formulation
process and chemistry were optimized for mRNA delivery thus generating
electron-dense ~80nm particles and easily surpassing >90% encapsulation
efficiencies that are thought to be required to pass regulatory CMC muster.

Tumors giving liver run for its money

What had caught my eye when Tekmira presented firstmRNA delivery data at the Tuebingen mRNA conference in October 2013 and which was
further substantiated in the present presentation, in terms of absolute gene
expression, their mRNA delivery seems to perform as well if not better in liver cancer and
non-liver cancer models compared to in normal hepatocytes. This could be due to a less RNA degradative
environment in tumors versus the liver of which an important function is
detoxification. This is supported by the
fact that the duration of mRNA expression in tumors greatly exceeded that in the
liver (a gene with a short protein half-life was used).

This made me think of the recent oncology spin-out (Onkaido)by mRNA Therapeutics company Moderna, the darling of mRNA Therapeutics which has raised around half a billion
dollars in partnership money (AstraZeneca, Alexion, DoD) and fund raisings over
the last 18 months alone. The spin-out
and internal focus on genetically defined orphan diseases may mean that
Moderna would like somebody else to fund Onkaido, for example as part of a joint venture. Remember, for most Big Pharma companies, RNA
Therapeutics are first and foremost interesting for oncology as it allows them to go
after the targets that their scientists have been dreaming about for so long
yet were not able to drug.

Given that most of the de-risking in oncology drug
development occurs late in clinical development, it is debatable whether
Tekmira, already with a lead candidate in oncology (TKM-PLK1) should focus their in-house mRNA development attention towards oncology
initially and whether this might not be better done as part of a spin-out/joint
venture (Onkaido and/or Big Pharma).

For the liver, mRNA expression was detected in essentially every hepatocyte. This supports the use of SNALP-mRNAs not only for the use of the liver as a factory for protein production, but also for diseases
with defects in single genes expressed in the liver, including those genes that
act only in the cell that they were expressed in (cell autonomous). Compared to oncology, such indications would
also allow for earlier clinical de-risking and together with orphan status mean that
they better match the profile of a (still) sub $500M market cap
company.

More upside

Given that Tekmira has only been working on mRNA Therapeutics for a year plus
(1-year stability data were presented) and since simple off-the-shelf mRNA
chemistry was used, one can only dream which diseases could be addressed and
where the company could go with this, including developing their own mRNA
Therapeutics instead of viewing it as a simple monetization opportunity.

Tekmira mRNA developments that I am looking out for include
advances in mRNA delivery to the lung epithelium. Tekmira has been, and according to the presentation is still actively working on inhaled LNPs, and it would be logical if they
adapted that effort towards mRNA delivery.
Expressing CFTR in lung epithelia for the treatment of cystic fibrosis
(CF) would be an obvious target here that could rally a lot of support from various stakeholders (important for companies like Tekmira).
Gene therapy involving the inhalation/instillation of DNA to the lung
has failed, in large part due to the difficulty of getting the DNA from the
cytoplasm across the nuclear membrane into the nucleus. Just like in RNAi, mRNAs only need to get
into the cytoplasm, a much simpler task.
Moreover, in CF you should not need to get the mRNA into every cell.

A final opportunity for Tekmira is the co-formulation of
mRNAs and siRNAs into a single LNP.
Imagine an oncology drug targeting both cancer drivers such as PLK1 and
overexpressing tumor suppressors.

Friday, February 21, 2014

In addition to the continued validation of RNAi in
Man, the other big winner of 2013 in the field of oligonucleotide therapeutics
was single-strand phosphorothioate chemistry in the CNS. Today, ISIS Pharmaceuticals announced clinical
data from the most prominent candidate in that effort, namely ISIS-SMNRx for spinal muscular atrophy (SMA), a genetic muscle-wasting disease. Following intrathecal administration of the
splice modulating oligonucleotide, time- and dose-dependent improvements were observednot only in muscle function, but also in SMN protein production (biomarker), thus laying the foundation for
an accelerated approval pathway.

In the open-label phase Ib/IIa study in ~30 children with
the ‘less severe’ form of type II and III SMA, functional improvements of 1.5,
2.3, and 3.7 points on the HFMSE scale were seen at the 3mg (3 doses), 6mg
(3 doses), and 9mg (2 doses) cohorts, respectively. The changes were thus largely consistent with results from a previous similar, but single-dose phase I study where a 3.1 point
increase could be observed at the 9mg dose.

Despite the generally positive news, the data raise a number of questions. For example, optimal dosing frequency remains
uncertain as there were similar functional improvements regardless of whether a single dose had been given or 2-3 doses. This could have been due to the long half-life of the drug and the time it
takes from SMN protein production (as a
result of the splice modulation) to impacting motor neuron function. Similarly, in the prior phase I study no
positive changes in HFMSE scores were observed at the 3mg and 6mg doses whereas in the present study, improvements were reported. Clearly, larger patient numbers are
required to settle on the optimal dose, and in fact this dose may not have been reached yet (note: a 12mg cohort has been initiated and children from the phase
Ib/IIa trial are allowed to roll over to an additional dose of 12mg).

Case for accelerated approval?

Possibly foreseeing such issues due to small patient numbers, ISIS Pharmaceuticals and BiogenIdec recently developed an assay that allows them to measure SMN protein abundance in the cerebral spinal fluid (CSF). It is the results from these measurements that provide a strong case for why ISIS-SMNRx should
be made available (pending the 12mg results) before a larger phase III study
will have been completed. This is
because the functional improvements were accompanied by increases in the SMN
proteinwhich also were dose-dependent with a more than doubling of SMN protein at 9mg.

In SMA, the SMN1 protein is missing due to mutations. The therapeutic approach of ISIS-SMNRx takes advantage of the fact that humans have a pretty much identical gene to SMN1, SMN2. The
problem with SMN2, however, is that only ~10% of its precursor messenger RNAs
is spliced into a functional SMN protein due to a difference in essentially just one nucleotide in exon 7. The severity of the disease, i.e. whether
somebody belongs to type I (most severe), type II, type III, or type IV of the disease
depends on the copy number of SMN2 genes: 2 copies in type I, ~3 copies in type II and III, and at least 4 copies in type IV.

Therefore, doubling the protein output for type II and III patients (the patient population in the present phase Ib/IIa study) would appear to put
the children into the type IV category in terms of protein output (correponding to ~6 SMN2 copies). In
contrast to type I-III, type IV results in no differences in life-expectancy and only in
rare cases causes patients to be wheelchair-bound late in life.

Just in: ISISis reporting preliminary data from a parallel multi-dose phase II
study in the most severe, infant form of SMA (type I). Although small in numbers, the fact that the 4
babies at the starting 6mg dose are still alive and without permanent
respiratory support at an average age of 12.5 months appears to be much better
than expected. According to natural
history data, you would have expected 2 babies either dead or on permanent
ventilation by month 10.

And finally...the ISIS-SMNRx results increase the value of Marina Biotech's CRN chemistry. This chemistry competes with the ISIS 2'MOE chemistry employed in ISIS-SMNRx and appears to be of higher potency/affinity, but much less defined safety.

Thursday, February 20, 2014

Starting
today, the 2014 sequel to the inaugural RNAi Therapeutics Investment Guide published
in 2013 is available.

Who should read the Guide?

The Guide
should be particularly useful for pharmaceutical business development people
and executives as well as investors in the public stock markets (esp. biotech)
in order to gain a broader understanding of the technical, regulatory, and
economic context of RNAi Therapeutics drug development. Investment opportunities and related risks
will become apparent.

Specifically,
the Guide

a)Recaps the most important technical, clinical, capital markets,
and business development events
related to RNAi Therapeutics in 2013 leading up to a snapshot of the current industry status. This includes putting these topics in the
context of broader economic and regulatory trends as well as the field of
Oligonucleotide/RNA Therapeutics;

b)Provides an outlook on 2014,
particularly a discussion of important RNAi Therapeutics product candidates and upcoming clinical read-outs in 2014. In addition, it will give a sense of how the year may play out in
the capital markets (business development
and stock markets) in more general terms;

Wednesday, February 19, 2014

The hard work has paid off and Arrowhead Research can now be
considered the third financially strong RNAi Therapeutics platform company after Alnylam and
Dicerna. With ~$200M in cash following a
strong $104-120M offering overnight, Arrowhead is in a position to broaden its
development pipeline and advance single molecule DPC delivery with urgency. These two elements in addition to the cash cushion should provide some protection from any setback of its lead candidate
ARC520 for chronic HBV.

Expectations around ARC520 had
grown so much that it threatened to take the platform, the ultimate value driver of Arrowhead, hostage. While functional cures in phase IIb in the middle
of 2015 could send the company into $10B valuation ranges, a failure due to the
underlying mechanistic (immune reactivation) hypothesis not materializing or due to insufficient
target knockdown with the 2-molecule DPC technology at 2mg/kg, had the potential to set back the company for years.

But that's the game in biotech and that's how it should be I hear you say. Yes, but only if you are not a platform company. If you are, then there is no need to take the same risks. On the
other hand, I do not like when platform companies shy away from going all the way with their pipeline candidates. ISIS Pharmaceuticals comes here to mind which for example gave away an exciting drug candidate (ISIS-SMNRx) in 2012 for which it has earned around $50M in milestones, but which is valued in the billions for Biogen Idec by analysts. As such, I would not have looked kindly on ARC520 spin-out ideas that have surfaced at last week’s BIO CEO 2014
conference. Building a nice cash
position was definitely the right answer to the present conundrum.

What the fund
raising means more generally for RNAi Therapeutics

When $1B market company (fully diluted) like Arrowhead
Research raises $100M at no discount on the back of strong trading and less
than 6 months after its last significant and impressive capital raise ($60M),
it can only mean one thing: Wall Street's got it and wants more of RNAi Therapeutics. It is finally recognizing RNAi
Therapeutics for its potential and is keen to give players in the space the
license to succeed in the form of a healthy cash position. If RNAi Therapeutics fails to succeed it will not have been for a lack of money.

Of course, other players in the space will be keen to
capitalize on the current interest. In
this generally beneficial environment, it is no coincidence that Arrowhead
Resesarch and Tekmira are receiving most of the investor attention. After the amazing pipeline expansion (9 disclosed, 12 undisclosed programs) by bellwether Alnylam on the back
of a similar string of capital raises and a 10x share price increase over the last 2 years, from a platform technology
point-of-view, there is little reason why these 2 companies should not be able
to replicate that come late 2015.
Arrowhead, Tekmira, and Alnylam also benefit from the 2009-2012 funding
drought that gave their delivery technologies a big lead over less developed
ones when they scraped together their last pennies to prove out their technologies in the clinic.

There are earlier-stage, promising technologies by other
companies that I would like to see funded in this environment. It is good, however, to see the most
developed ones supported first not only because they earned it, but also because their clinical successes and speed of value
creation will further support the sector more generally.
I am also concerned that blindly investing in RNAi Therapeutics as it is seen as a ‘hot sector’ these days could trigger a backlash as bad players are lining up to take advantage of the interest.

Thursday, February 13, 2014

Finally! Long overdue
(because so obvious and compelling), with the founding of Voyager Therapeutics, the
foundations have now been laid for a strong AAV (adeno-associated virus) platform gene therapy company, including DNA-directed RNAi Therapeutics. Taking advantage of new AAV shuffling approaches to
identify novel serotypes (Gao and Kay labs) to more efficiently and specifically
target cell types of interest and the world-class expertise in RNAi trigger design of two of its scientific co-founders (Kay and Zamore labs), the new company will make use of the best available
science to realize the potential of AAV and ddRNAi technology for the many diseases of
high unmet medical need in the CNS (e.g. Huntington's disease).

With $45M in start-up funding from Third Rock Ventures (the VC that has started the comparable lentiviral-based gene therapy company which recently went public, bluebird bio), they will deepen that expertise
through in-house research and
thereby sail by Benitec which sadly has refused to face the fact that in order
to be a platform company and stay relevant you need to have such efforts. If not at a time like this when interest is
high, then when?? The latest publication by Benitec and Pfizer (Denise et al. 2014) was ironically the best illustration of that omission by showing that the first-generation ddRNAi expression
technology of Benitec generates a plethora of small RNAs which obviously is less than
ideal. By contrast, work in the Kay lab
in particular (e.g. Gu et al. 2012) has shown how to generate much cleaner expression cassettes.

Voyager strutting its RNAi expertise and related therapeutic development plans is further
confirmation of the dramatic decrease in the value of Benitec's once-prominent IP position in ddRNAi (Graham patent). With an expiration of ~2018-2020 and Baulcombe the real gate-keeper (although the clock on that one is also rapidly running down),
I don’t see why there should be a need to take a license except for maybe the
likes of Calimmune which may have something close to commercialization by then
should things proceed without a hitch.

The start of a company like Voyager is always very exciting and I trust that the
scientific founders have the expertise and wisdom to guide it along the way. It is also a good time to acknowledge the
likes of Dirk Grimm (Heidelberg), Shuo Gu (NCI), and most recently Leszek Lisowski (Salk) which I had the privilege of
working next to in the Kay lab when they were critically contributing to the
technology underlying Voyager. The
pharmaceutical industry and indeed the investor community is wasting a lot of
potential by not tapping into the skills of such driven scientists just because they may not labor in one of the biotech hotbeds.

Tuesday, February 11, 2014

Today at BIO
CEO 2014, Tekmira presented tantalizing preclinical data (slide 11) showing more than 95% reductions in serum triglycerides,
the lipids that clog up your arteries (think heart disease and stroke) and in
extremely high cases cause severe bouts of pancreatitis. Such
reductions in triglycerides are unprecedented as fiddling around with fish
oils, fibrates, and niacins has become a worn, unsatisfactory edge in managing
this important lipid.

Enter RNA(i)
Therapeutics. By taking full advantage
of the technology in being able to target any gene in the pathways
leading up to triglyceride production and accumulation, we are not far away from
achieving much more pronounced lowerings than the current standard of medical care. This was impressively illustrated by
the 70-80% lowerings of serum triglyceride in the phase II studies with
ISIS-ApoCIIIRx, an RNaseH antisense compound by ISIS Pharmaceuticals.

If you have
been following my blog, however, I believe that despite the ISIS head-start, this
lunch will eventually be eaten by RNAi Therapeutics. In addition to their superior ability to effect gene
knockdown in the liver, the Tekmira data went one step
further to fully take advantage of the mechanistic opportunities offered by
RNAi Therapeutics, in particular those delivered by technologies such as SNALP
LNPs: multi-targeting.

As pioneered
by SNALP-enabled TKM-EBOLA and ALN-VSP02 (for liver cancer), SNALP LNPs lend
themselves to targeting multiple genes in a single drug. As a consequence, it should be relatively
easy to come up with a target combination that can not only lower serum
triglycerides more potently than could be achieved by targeting a single gene such as ApoCIIIRx, but also lower liver triglycerides (à fatty liver, fibrosis), improve
insulin sensitivity and the lipid profile on other fronts such as
LDL-cholesterol. Such a profile would be
highly attractive since a given patient often will suffer from a number of
these conditions (metabolic syndrome).

For Tekmira,
as for ISIS Pharmaceuticals, the first markets, however, will be the severe orphan diseases related to triglycerides such as those involving severely
elevated levels of serum triglycerides (>500) leading to pancreatitis. Depending on the safety and tolerability
profile, the market potential beyond these indications could be considerable
and possibly limited by the inconvenience
of having to go for monthly infusions.

But
seriously, if you are going to take a medicine that costs on the order of $100k
a year, you better take what is medically best for you and it would most likely
still be a pharmacoeconomic steal if you charged the system for taking a stretch limousine to the infusion center to take care of the inconvenience (I'm particularly keeping an eye here on how the MS market evolves). At least this primacy of efficacy is where I
am hoping the healthcare cost discussion will steer the market in the future. As such, Tekmira should not by shy in focusing
on its competitive strength of achieving maximal target knockdowns.

Saturday, February 8, 2014

In case you
were wondering why RNA Therapeutics stocks have been going up and up regardless of the overall markets, it is because it is happening right
now: RNA Therapeutics are claiming the role of the 3rd major
drug discovery engine, the most vibrant at that, following small molecules
(withering) and recombinant proteins/monoclonal antibodies (running out of
target space). It therefore becomes important
to anticipate the next major event on that road which are the results from two
separate multi-dose phase II studies of ISIS-SMNRx to be reported sometime over
the coming 6 weeks.

ISIS-SMNRx
for the treatment of severe, orphan disease spinal muscular atrophy (SMA), a muscle wasting disease, is
yet another powerful example of how RNA Therapeutics typically target the root
causes of diseases rather than merely covering up their symptoms as drugs so
often are designed to do, especially drugs for chronic illnesses.

In SMA, the
SMN1 gene is inactivated due to a mutation.
Luckily, there is another SMN1-like gene, SMN2, and this differs from SMN1 by
one nucleotide. As a result, splicing of SMN2 predominantly generates transcripts lacking an exon which in turn results in inactive SMN proteins. Only a small fraction of SMN2 is spliced functionally. By antagonizing a splice
silencer element on the SMN2 precursor mRNA, phosphorothioate 2’MOE antisense
ISIS-SMNRx redirects splicing towards the active form of SMN thereby rescuing
the deficiency underlying SMA. It is insights like these why you want your kids to
study biology.

Following
intriguing phase Ib/IIa results from a small, open-label single-dose study in
kids with type II and III SMA (‘moderate’ and ‘less severe’ forms of the
disease) which showed dose-related continual functional improvements over 9-14
months, consistent with the long half-life of the oligonucleotide in the CNS,
the multi-dose phase II studies aim to confirm that in a larger patient
population. In addition, a second
phase II study is conducted in infants with the very severe type I form of the
disease which results in nightmarish life expectancies of less than 2 years.

It is the compelling
scientific rationale, the 12mg dose, the preclinical efficacy and PK results at
even smaller dosages and the tantalizing phase Ib/IIa results described above
that you would think that the outcome from these two studies should be
positive.

If they are,
expect them to be all over the news and RNA Therapeutics stocks continue their
march upwards.

ISIS-SMNRx was discovered by ISIS Pharmaceuticals and is partnered with BiogenIdec.

Disclaimer: This blog is not intended for distribution to or use by any person or entity who is a citizen or resident of, or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would subject the author or any of his collaborators and contributors to any registration or licensing requirement within such jurisdiction. This blog expresses only my opinions, they may be flawed and are for entertainment purposes only. Opinions expressed are a direct result of information which may or may not be accurate, and I do not assume any responsibility for material errors or to provide updates should circumstances change. Opinions expressed in this blog may have been disseminated before to others. This blog should not be taken as investment, legal or tax advice. The investments referred to herein may not be suitable for you. Investments particularly in the field of RNAi Therapeutics and biotechnology carry a high risk of total loss. You, the reader must make your own investment decisions in consultation with your professional advisors in light of your specific circumstances. I reserve the right to buy, sell, or short any security including those that may or may not be discussed on my blog.